Industry: manufacturing

Invoice finance for manufacturers

Materials and labour are paid for during production. The customer invoice is not raised, or paid, until months later.

Typical advance, manufacturing75–85%0%25%50%75%100%Typical advance rate for manufacturers
Manufacturing has one of the longest cash-conversion cycles of any sector: raw materials and labour are paid for throughout a production run, but the invoice to the customer is not even raised until the order ships, and payment terms of 60 to 90 days often follow that. Invoice finance advances against the invoice as soon as it is raised, shortening the wait from months to days.

The cash-flow pattern

A manufacturer taking on a larger order effectively pre-funds it, buying materials and running production weeks or months before a penny of matching revenue arrives. Growth orders are the ones most likely to strain working capital, precisely because they are the largest and slowest to convert to cash.

Who it helps, who it does not

Ideal fit
  • Make-to-order manufacturers funding materials and labour ahead of a shipped-order invoice
  • Businesses on 60–90 day customer terms where the production cycle itself is already long
  • Order books with a few large, credit-worthy customers, suited to selective invoice finance
Poor fit
  • Retail or consumer-facing manufacturers selling on immediate or card payment, there is no unpaid invoice to fund
  • Make-to-stock producers where goods sit as unsold inventory rather than an invoiced order
  • Businesses needing funding for materials before an order is even confirmed, invoice finance only advances against invoices already raised

Eligibility notes

  • Active UK limited company, LLP or plc, verified against Companies House
  • Invoicing other businesses (domestic or, with the right partner, export) on payment terms
  • Works alongside separate stock or purchase-order funding where needed
  • Large or lumpy order books suit selective invoice finance as well as whole-book facilities

Worked example

A components manufacturer shipping a £120,000 order to a single customer on 75-day terms:

Illustrative, based on typical UK market ranges
Invoice value on shipment£120,000
Advance rate80%
Advanced within 24–48 hours£96,000
Held back until customer pays£24,000
Service fee (1.25% of invoice value)–£1,500
Discount fee (base + 2.75%, ~75 days on drawn funds)–£1,610
Net released after customer pays£20,890

Frequently asked questions

Why does manufacturing suit invoice finance particularly well?

Manufacturers pay for raw materials, labour and overheads throughout the production run, well before a finished order ships and the customer invoice is raised, let alone paid. That production-to-payment cycle can run months, tying up cash long before revenue arrives.

Can invoice finance be combined with stock or purchase order funding?

Yes, many manufacturers layer invoice finance for shipped orders with separate stock or purchase-order funding for the production stage. We focus on the invoice-finance side; a funding partner can advise on combining products.

Does export invoicing complicate eligibility?

Export invoices to well-rated overseas customers can often still be funded, but terms vary more by market than domestic UK invoicing. We flag this during matching so you see partners who actually cover your export customers.

What if my order book is lumpy, with a few very large orders?

That is common in manufacturing. Selective invoice finance lets you fund individual large orders as they ship rather than committing your whole ledger, which often fits a lumpy order book better than a whole-book facility.

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Related
Invoice discountingSelective invoice financeInvoice finance for wholesalersInvoice finance for logisticsEligibilityInvoice finance overview

Last reviewed: August 2026

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